Posts Tagged ‘homebuyer’

I read an interesting fact today: 44% of consumers find the homebuying process scary or intimidating. That is a staggering number of people who are unsure of the process and need guidance. The good news is that today it is easy to make finding your next home a fun and positive experience.

Here is my advice on how to make the process not so scary:

Hire a great agent – Yes, there are many real estate professionals out there, and yes, some will make promises to the moon and back, maybe even tell you they will give you back some of their commission if you choose to work with them. But that does not make one a great agent. Here is what does: experience, local knowledge, intelligence, familiarity with the homebuying process, strong negotiation skills, great referrals.

Find a professional mortgage officer – This is another of those “must haves” when searching for a home that could either make or break a purchase. You need to find a great mortgage officer PRIOR to searching for homes. That person should have all of your data and necessary paperwork so he or she can issue a preapproval – this is important for two reasons: 1. it will tell you how much you can afford, and 2. You will have a higher chance of getting an offer accepted if you are preapproved.

Choosing a mortgage professional is similar to selecting a real estate agent – there are many who will talk the talk and even make promises, but you need to feel comfortable with that person – yes, it’s about getting a great loan but it’s also about making sure the lender can close your loan. If you do not know where to start it is often good to ask those you trust, including that great real estate agent!

Get educated and start your search way early-I tell ALL buyers that it is never too early to start getting ready to purchase a home. If you plan to buy in a year, two years that means you need to get educated and you should start now. Learn about different neighborhoods, their amenities, positives and negatives. If you have children look up local schools and see how they rate – talk to neighbors in potential areas you like and ask about the neighborhood, schools and anything else that may be important.

Most importantly, start looking at homes way before you are ready to buy! Most people hear this and ask me why, so I tell them that you will learn a lot about different areas, floorplans and so much more. When it does come time to buy you will know more about the areas in which you want (and don’t care) to focus, which will make the homebuying process way less scary! So get out there and visit open houses, schedule appointments with your agent and start learning.

It is also important to note that you can learn a lot about homes online – with so many informative real estate sites available at your fingertips you can learn about amenities and so much more.

Stay Organized: Use all the above tools to your advantage and create a folder so you can categorize those areas and even floorplans that have potential. If you are not planning to purchase immediately you will likely forget all the things you learn along the way.

Home owner associations (also called HOAs) can become a big part of the buying decision for home buyers – some love them, some despise them. If you live in an area where there are many neighborhoods that have HOAs, or if you are thinking of moving to one, you may wonder whether they are positive or negative.

Let’s take a look at the pros and cons of HOAs, so that you can decide for yourself.

HOA Pros

– Expenses keep the neighborhood and any common areas (streets, landscape, lighting) looking their best, which keeps property values higher. Without a governing body things could get sticky if neighbor participation is needed to fix problems.

– They protect you from having to live with unattractive decisions made by your neighbors (putting a car engine back together in the driveway, painting a garage or front door an unsightly color, dead landscape, neglected painting, siding, trim, etc.). Noise abatement, fire setback landscape maintenance rules, and other rules help keep you sane and protected

– Pet restrictions may save your hearing if your neighbors have dogs that bark a lot or use your yard as a toilet

– HOAs mediate disputes amongst neighbors. If your neighbor’s dog barking wakes you up, or if they over-water landscape and it runs into your yard – or many other types of problems that may arise – the HOA is there to reach out to the neighbor and try to resolve the issue for you. This can save your sanity and prevent strained relations with your neighbors.

HOA Cons

– They can be expensive

– They dictate what you can and cannot do on your property (e.g landscape plans, paint choices, structural changes)

– There may be pet policies that restrict types or numbers of pets one is allowed to have on the property

– HOAs can place a lien on your property, or even force a foreclosure in some cases, if you do not pay your dues on time, which can create problems if you decide to sell your home. It can also affect your credit.

– Dues can be increased at any time, especially if there is a big ticket item that needs to be repaired (e.g. if there is a community pool and it needs to be resurfaced, or a clubhouse that needs a new roof).

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The bottom line is that HOAs have both good and bad points. You have to give up some freedom to live in an HOA community, but you also can rest assured that neighbors won’t do crazy things to their properties (or at least won’t be able to get away with it) that can affect the value of your home. Also, not all HOAs are equal – some may be very good at management while others may not.

Before you consider buying a home in an HOA community you should do the following:

Ask the neighbors how they feel about the HOA, and call them with any questions you may have.

Make sure to read through all the HOA material you will receive from escrow, so you understand the rules and regulations you will be subject to as a homeowner – this caused one escrow to be cancelled in my years working as a real estate agent.

If you are a buyer looking for a home, or if you plan to do so soon, there are a few things you need to be aware of that could kill your chances of getting a loan. Although I am not a mortgage professional, because I work closely with them on a daily basis I felt it important to share some tips with those who are planning a future purchase and need to secure a loan. Many lenders pull credit and also ask for account statements again right before closing, so be careful.

Here are the most important things to avoid in order to secure a loan:

Do not quit your job, change industries or start a new company (this alters your tax status and you will not be able to provide 2 years of steady employment history, as the clock starts ticking all over â€“ I personally had this happen and had to wait 2 years to refinance)

Do not cosign on a loan with anyone (you will be 100% responsible for it if the other person defaults)

Do not switch from a salaried job to one with a commission.

Do not transfer large sums of money between bank accounts.

Do not forget to pay your bills, even if there are some in dispute

Do not open new credit card accounts, even if it will save you money

Do not accept a cash gift without filing the proper “gift” paperwork

Do not make random, undocumented deposits into your bank accounts

Do not purchase a new car or trade up to a pricier lease (in fact, it is advisable not to trade any lease until your loan has closed, even if it lowers your payments)

Do not purchase any big ticket items like furniture or window treatments â€“ you need to be patient and wait until you have closed escrow

The best advice when applying for a home loan is to avoid spending on anything that is unnecessary before and while the loan is being processed. Plan to eat at home and be frugal for the short period. Most importantly, speak with a mortgage professional, get preapprovedÂ and make a plan so you can work closely with your real estate agent to stay within your boundaries. It will be well worth it in the end!

With most home sales the buyers do not move into their new home until escrow closes. However, there are times where situations make it difficult for the buyers to wait out the closing, and both parties agree to allow the buyers to move in prior to closing, via an Interim Occupancy Agreement. These agreements are tricky and can be fraught with legalities, so if you are considering becoming party to one, make sure you understand how they work and what could happen if things don’t go according to plans.

An interim occupancy agreement allows the buyers of a home to move into the home as tenants during the escrow period, before title has transferred into their name. The parties to the contract agree to a daily rate, and usually the buyers will pay for utilities and maintenance during this interim period. It can be a blessing for some buyers, who may have nowhere else to live until their home closes, especially when the home is vacant. It can also be great for sellers who do not live at the property, as their home will be maintained during the remainder of the escrow period.

Most lawyers, myself included the majority of the time, will advise against interim occupancy agreements. Here are some things to consider when determining whether such an agreement will work for you as a buyer or seller:

1. Escrow Problems. One has to really take into consideration the status of the escrow before agreeing to such a scenario. As a seller, it is important to note that if there are any problems with escrow and it ends up NOT closing, you will now have tenants in your home that need to be evicted. Evictions can be difficult if there are any issues, and there could be damage/wear and tear to the home. Interim occupancy agreements have specific language that address many issues, but the fact of the matter is that the seller may have to deal with these and other problems if things do not go smoothly.

2. Injuries on the property. Another thing to consider as a seller is what could happen if someone is injured or even killed on the property during the time the buyers are tenants. Again, most agreements have language that relieves the sellers of liability in such cases, but in today’s litigious society it is something to think about when deciding whether to enter into such a contract.

3. Unforseen issues. Another point to consider is what happens if the buyers (after moving in prior to the close of escrow) claim there are issues with the property about which they were unaware, and then ask for a price reduction, credit, or to renegotiate with the sellers. Again, many agreements have language addressing such issues, but if it were to happen it could put the seller in a difficult situation, where s/he is forced to either negotiate or have to deal with eviction and a possible sticky set of circumstances.

Sellers are not the only ones who have to be careful in the case of interim occupancy agreements. Buyers are also taking a big risk moving into a home that is not yet theirs. If something does go wrong and escrow is unable to close, the buyers will have to incur double moving expenses to get out of the home, and may even have to move several times before they are able to purchase another home.

Although it is important to approach these agreements with caution, there ARE situations where I believe they can actually hold value for all parties involved. One of these situations is where the buyers’ loan has been fully approved and docs have been signed, and everyone is simply waiting to record. Oftentimes there could be a weekend in between signing and recording, and in such a situation I see no harm is allowing the buyers to move in early. There are other times when such agreements may benefit both parties more than the risk involved, so it is important to weigh your specific circumstances, speak with your agent, and consult with an attorney before making a decision to sign such an agreement.

Today is my parents’ 50th anniversary – an amazing milestone to reach in this day and age – and it got me thinking about sustainability. In our world of bigger, better, faster, oftentimes a new widget is replaced so quickly that you barely had time to enjoy the now “old” version you just purchased a few months ago. I still love my iPad 1, and don’t plan to buy the 2. As for my iPhone 4, it does everything I need and I don’t plan on replacing it with the iPhone 5 that is shrouded in mystery but being hyped up nonetheless. Housing is similar.

Back during the housing boom everyone wanted to upsize – McMansions sprung up all over and there were multiple offer situations going on everywhere. It was a listing agent’s dream. I remember I put a listing on the market on a Thursday, with instructions that there would be no showings until Saturday (the sellers wanted to clean it), and I had 3 offers Friday night (sight unseen), 7 by the end of the weekend. It was a great time to be a listing agent, but I often wondered why so many people wanted to move up – many of them had nice homes and didn’t need more space. I think in part many people were keeping up with the Joneses, others just were thrilled that the banks were going to give them mortgages on their dream homes – ones they thought they’d never be able to afford (and many could not).

Sustainability is defined as the ability to be sustained, supported, upheld, or confirmed. In an economy that is gripping people around the wallet so tightly, many don’t focus on sustainability. But housing is sustainable. Let’s consider how: first, it is necessary; we all need a roof over our heads. Second, it is like the stock market – it goes up and it goes down, but when it is down you know it will rise again. The difference with housing is that the risk in buying a home (that you can actually AFFORD) is not as great as investing in stocks, bonds, or minerals. In the long run it becomes sustainable. But that is the trick: you need to focus on the long run.

Buying a home these days is not as easy as it was in the early 2000s, and in this we should take comfort. Buyers who buy a home that they can live in for a long time, one for which the payments are comfortable and possible, will eventually see equity grow. Investing in a home isÂ investing in your future, the future of your family, and the economy as a whole. So choose wisely, and focus on long term goals. You will be happy you did, and you will understand that homeownership is still part of the American dream, and a smart choice.

In the spirit of sustainability, I wish a very happy 50th anniversary to my incredible parents. They are enjoying an Alaskan cruise, courtesy of their loving children (something I am so glad I was able to do).Â I too celebrate a wedding anniversary this weekend – 18 years; not as long as 50 years, but we plan to be there too one day. No matter what you do in your life, sustainability is a positive goal on which to focus in many situations, especially when you are in it for the long haul.